Are we more inward looking?

October 7, 2013

Is part of the challenge facing business today that it has become more inward-looking?

Over the last 20 years, the use of technology has mushroomed, dramatically reducing the need for people to fulfill many of the basic tasks within business. ERP systems especially created an underpin of standardization that decimated administrative functions. One of the next big trends was compliance – software that would steadily come to eliminate unapproved actions or variations. Initially driven by a desire to cut costs or maintain margins, compliance took on a new life with the surge in regulation, forcing ever-greater oversight of actions and decisions.

It seems to me that two characteristics have been the primary victims of these changes: one is breadth of vision and the other is judgment.

The environment I am describing is resulting in the steady growth of specialists – people and functions with a deep understanding of a specific issue or topic, but a limited sense of overall context. As a result, the challenge of ‘functional stove pipes’ continues to get worse.

At the same time, compliance has eliminated the potential for individual judgment. It has become much harder for anyone to do the right thing – for example with regard to customer service – because the rules and the process prevent them. In such an environment, there really isn’t much point in thinking ‘outside the box’.

Overall, it seems to me, businesses have become far more introverted and less capable of seeing or caring about other perspectives. They care and respond to the outside world only if data from ‘the system’ tells them they should. Human dynamics and relationships play an ever smaller part in all this.

If I am right, then it should be no surprise that failure to properly understand and respond to requirements is becoming more of an issue and a growing source of claims and disputes. Today’s inward-looking business desperately needs more people who can bring intelligence and judgment to interactions with the outside world – to customers and suppliers. This means it is important for those in contract and commercial groups to resist the temptation to be yet another compliance expert and to focus instead on developing breadth of vision and the ability to apply judgment in the advice they give and the commitments they endorse.